Kentucky State Pension Crisis Has Unionized Workers Worried
Unionized Kentucky government employees are protesting against pension cuts that are being proposed by Governor Matt Bevin as the state’s pension crisis runs out of control. Over the Labor Day weekend, members of various public sector unions gathered in Louisville to discuss their next plan of action as the pension crisis brews.
The state’s retired teachers and other government employees are facing the threat of losing pension benefits, which they contributed to over the course of their employment. The state is reported to be $64.0 billion short in its pension liabilities to government retirees.
Just a year ago, Standard & Poor’s Financial Services LLC estimated that the State of Kentucky’s pension funds had just 37.4% of the funds necessary to pay its obligations to its retirees. In fact, one of Kentucky’s pension plans, which funds the pensions for most of the state government’s employees, is the most underfunded state government retirement plan in the United States.
Bevin is now proposing pension reforms, under which government retirees will see their pensions being trimmed, while current employees will be shifted from the current “defined benefit” pension plans to 401(k)-style benefit programs. State lawmakers believe that the initiative will help cover off some of the unfunded liabilities.
However, workers’ unions are standing against Bevin’s proposal. At the Louisville Labor Day gathering, a representative of Service Employees International Union, Richard Becker said, “These are workers who decided to go into public service because of the promise of strong retirement when they got to the end of their careers, and so we’re obviously going to be fighting to make sure the pension system, as it was promised to our members, is upheld.”
Union members are currently trying to raise awareness about the issue and are considering a plan to reach out to local representatives to stop the pension cuts.
“Union members react to possible pension cuts during Labor Day picnic,” WHAS 11 ABC, September 4, 2017
“Kentucky Pension Crisis: Is the state’s pension problem the worst of any in the country?,” Courier-Journal, August 29, 2017.
“Bevin launches pension crisis information website,” Courier-Journal, August 17, 2017.